Negotiating Disability:
The Politics of Integrated Disability Management *
Kenneth Mitchell, Ph.D.
UnumProvident Corporation
Chattanooga, TN
“Disability is subjective and depends ”
Integration, Coordination or Segmentation? At the core of the integrated disability
management (IDM) process is the notion of negotiated disability. An extensive research
record has demonstrated that work disability is subjective and depends on many factors.
For example, the employer’s ability or willingness to accommodate the employee’s
impairment can extend or shorten the duration of lost time. For some individuals, the
injury or illness arrives at a critical juncture in their career or work performance. The
employee’s corresponding motivation to stay off work or return to work in a timely
manner plays a critical role.
Corporate policies define the organizations’ expectations regarding lost time and
application of resources. Likewise, supervisors and managers within the organization
determine priorities and the overall effectiveness of the strategies applied to reduce the
impact of lost time. There needs to be continuity between these two critical drivers
within the disability management process.
State worker’s compensation statutes and private disability benefit plans are negotiated to
define the eligibility e and the appropriate compensation to be paid. Negotiated health
insurance and managed care plans define the degree of accessibility of care, the duration
of treatment and the desired providers. Empirically, we understand that impairment does
not equal disability. Impairment is objective. Disability is subjective. Therefore,
disability may and can be negotiated.
As an employer begins to consider the integration of the various income replacement,
claims administration and lost time management initiatives, effective negotiation of
disability begins. As the definitions of disability are negotiated, so is the manner in
which disability is managed. Disability is negotiated at two levels. One is at the
corporate level, creating the disability management model. The other is at the individual
employee level.
The initial corporate negotiation step determines the degree of program segmentation,
coordination or integration that may exist. Unfortunately, the negotiation is not active or
even formal. The disability management process is created in an unsystematic fashion,
evolving over time, maintained by habit and successful by luck.
*
This article was prepared from the presentation made by Kenneth Mitchell, Ph.D. to the New
England Chapter of the Disability Management Employer Consortium, Waltham, Massachusetts,
September 5, 2001
Negotiated Disability – Page 1
Figure 1 illustrates a disability integration continuum for an organization. The continuum
can have different degrees of fragmentation, disability migration, segmentation,
coordination and ultimately, some form of integration.
Some organizations move
through the continuum or become fixed at a particular level. All levels are negotiated to
some extent.
Figure 1
Integrated Disability Management Continuum
Fragmentation
Migration
Segmentation
Coordination
Integration
Progression of Internal Corporate Integration of Benefits
None
Mixed
Full
Fragmentation to Segmentation This is the common silo or commodity product
approach to benefits management. This model is negotiated with various competing
external vendors, as well as with the internal management. These segments work
independently and often in competition. There is little communication between the
groups and effective utilization of corporate resources. A segmented model can be
relatively benign. A fragmented program encourages excessive lost time and significant
corporate financial losses. Rather than being a product of negotiations, the levels of
organizational structure may be maintained by the lack of interest or skills in making the
organization work in a functionally coordinated fashion.
Disability Migration This is the active movement of lost time cases between and
within the segment. The intent is to seek the best combination of benefits or reduce the
defined risk. The employee and employer often unknowingly negotiate the migration
routes between work compensation to short term disability claims or the reverse.
Disability migration is the product of disability negotiation that creates unequal
incentives or rewards to control lost time.
Disability Management Coordination The coordination of benefits is most
commonly mistaken for integration. In the coordinated model, the focus is on negotiating
communication links and developing agreed upon service hand offs. A clear corporate
disability management philosophy serves as a foundation for all benefit management
activities. The disability programs may still be managed from different parts of the
organization with services provided by different vendors. This negotiated model offers a
corporate disability management template for these groups with decentralized benefits
management focus or a widely dispersed work force.
Negotiated Disability – Page 2
Disability Management Integration A truly integrated disability management program
reflects the corporate wide blending of all lost time management. This also includes the
various clinical and human resource management functions to control lost time. The
integration creates a single claims administration process, as well as a single stay at work
and return to work philosophy supported by cohesive set of strategies by management. A
single insurance vendor may be used or combined with a self-insurance program.
Points of Negotiation Once an employer has determined what level, degree and model
of integration fits their program needs and readiness, a more focused level of disability
negotiation begins. These negotiating points ultimately determine who is “disabled”
and who is not. These decisions determine the application of and the accessibility to
corporate disability management resources. Figure 2 identifies the key disability
negotiating points.
Figure 2
Corporate Negotiating Points

Eligibility Thresholds

Benefit Focus

Access to Care & Iatrogenic Disability

All or Nothing Return to Work Thresholds

Risk Management Politics

Collective Bargaining Agreements

Supervisor Incentives & Performance Evaluations
Eligibility Thresholds Eligibility for short term disability and worker’s compensation
benefits is typically negotiated with the appropriate insurance vendors through guidelines
set by state legislatures, regulators and benefit plan designs. The resulting disability
definitions and thresholds determine the nature and scope of who is considered disabled
or not. They also create the expected time frame a person may be
entitled/invited/expected to stay off work.
The greater the ambiguity of the definition of disability, the more potential for abuse. The
narrower the definition, the greater opportunity for disability migration and perceived
unfair treatment. Some employers control risk by negotiating disability definitions rather
than managing the post injury or illness adjustment.
Benefit Focus All too often the employer, with the encouragement from the insurance
provider, focuses on the insurance products rather than the individuals using the various
benefits. This is a benefit-centered vs. person- centered approach. The interaction
between worker’s compensation and short-term disability should be a common focus. A
Negotiated Disability – Page 3
more abstract, but potentially more powerful interaction, may exist between disability
benefits and health care utilization. Figure 3 illustrates a sample Pareto distribution of
health care utilization by individuals also using the disability benefits. The interaction
between health care and disability is critical. The resulting integrated disability
management program needs to reflect the reality of this interaction.
Figure 3 Sample Pareto Analysis of Benefit Cost Per Employee
C o st P er E m p lo yee
E m p lo yees
N o n -P areto
G ro u p
L o st T im e
P areto G ro u p
% of
E m p lo yees
LTD
$
STD/
S ick
$
W CI
$
W CM
$
M ed In s
$
A ll
B en efits
$
% of
T o tal
C o st
88%
0
154
0
23
1,321
1,499
42%
12%
78
2,895
1,478
1,424
8,816
14,692
58%
K ey A n alytic F in d in g : F ocusing m anagem ent initiatives on the 12 percent of em ployees that use
80 percent of LT D , S T D /S ick, and W C I benefits provides the opportunity to im pact 58 percent of
T otal H ealth B enefit P rogram costs. T hese high risk group of em ployees have 10 tim es higher costs,
on average.
As an integrated disability program is created, the ability to influence both lost time and
health care utilization is a natural and desired expectation. This will not occur normally
and will require close cooperation between the healthcare vendor, the employer and the
disability insurance partner. Historically, this has not been a natural alliance.
Access to care & Iatrogenic Disability Access to care must become a focused point
of negotiation to assist individuals to return to work in a safe and timely fashion. Two
treatment protocols commonly negotiated out of a return to work program are: post heat
attack cardiac rehabilitation and work hardening transitions following a leave due to
depression.
The capacity to have access to cardiac rehabilitation and behavioral health has shown to
improve return to work outcomes. Both of these treatment programs are tightly
controlled within the majority of healthcare plans. Effective negotiation to make these
parts of the return to work plan can change the outcomes of the integrated disability
product.
End of the benefit healing (EBH), i.e. immediate resumption of work the day before the
allotted number of days off, is real and may be an indictor of Iatrogenic disability. It
suggests a lack of effective management of the lost time case. The use of the duration
guideline as the start of the disability management process rather than the end must be
eliminated. A formal return to work plan created at the onset of the leave can provide
clear guidelines for the employee, employer, as well as the physician.
Negotiated Disability – Page 4
Iatrogenic Disability, commonly referred to as treatment or physician created disability,
may reflect a lack of attention by the attending physician to offer a formal work
prescription (WorkRx). The WorkRx invites the physician to go beyond the presentation
of work restrictions, but requires a well-defined set of return to work or stay at work
transitions. These transitions not only focus on a return to work date, but how the person
should resume full productivity.
The All or Nothing RTW Thresholds The 100% or nothing return to work practice
has shown to be a costly policy for employers to maintain. This practice is a common
residual of the return to work myth held by risk management professionals. Also, this
practice, while being applied to non-work related lost time cases, is often discarded when
considering a return to work for individuals on worker’s compensation.
One of the first steps in building an integrated disability management program is to
negotiate 100% of Nothing practice into obscurity. The most effective way to dispel this
myth is to closely examine the options in which employees can resume productive work
activities in a safe and incremental manner. By establishing employee neutral, RTW
pathways in 30-day increments the employer will support a fair and fully integrated
approach.
Risk Management Politics
A regularly negotiated return to work practice is to apply
a formal return to work program to individuals off work for an occupational related injury
or illness and not for those employees with a non-work related lost time. This negotiation
appears to be the product of a risk management program with an exclusive workers’
compensation orientation. This practice has shown to be a significant driver of excess
disability costs. Likewise, this type of program fails to recognize that non-work related
lost time could be 5 to 7 times greater than the work related lost workdays. As this
practice has been modified or negotiated to a level of parity, employers report savings of
some 30% to 50% in reduced lost work days and subsequent lost time costs.
Collective Bargaining Agreements
Historically, collective bargaining agreements
(CBA) define the safe working conditions, seniority benefits, etc at the work site.
Many employee relations and labor officials have the collective bargaining agreement
defer the question of when a person should come back to work to the attending physician.
While this is appropriate, the CBA can appropriately define “ how” an individual resumes
their work activities. In most cases, the “how” dictates the “when”. All too often, we
make how a person comes back to work as a “let’s see what happens” attitude. This
ambiguity confuses employees, physicians and supervisors alike. It also can reduce the
employee’s motivation to return to work by creating doubt in their ability to do the job.
Effectively negotiated RTW pathways offer both guidance and assurance to all.
Supervisor Incentives & Performance Evaluations In any political negotiation,
self-interests are the fuel for compromises. It must be in the self-interest of the
supervisor and individual to secure or support a timely return to work. There are several
options: The first step is to expect supervisors to support a timely return to work for their
employees. This can be done by making RTW support part of their job description and
reinforced by recognition within their performance evaluation. Correspondingly,
Negotiated Disability – Page 5
supervisors must be encouraged to resolve employee performance problems through the
appropriate human resources solutions rather than encouraging poor performers to go on
disability. Poor work performance and disability may appear to be two different issues.
They are closely connected and can be effectively managed through a fully integrated
disability management program.
IDM Program Development Negotiating Strategies When an organization initially
considers the development of an integrated disability management program; there are
several key negotiating strategies. Figure 4 presents these critical development steps to
become an effective disability negotiator.
Figure 4








Program Development Steps
Understand the impact of lost time
Build a single information platform
Create a uniform lost time strategy
Define policies to achieve desired outcomes
Define expected outcomes
Define RTW Planning roles and accountability
Educate managers, supervisors, labor leaders
Reduce segmentation
Understand the Impact of Lost Time The key principle of any negotiation is to
negotiate from a position of strength. Information is power. The senior management
team that understands the impact of lost time within their organization is better able to
define the resources needed to control the critical drivers. Without accurate information
that defines the real impact, any negotiation is a guess. As the question of disability
management integration is considered, the organization needs to define the accurate
impact of lost time and the corresponding drivers.
Build a Single Information Platform Many organizations look to create a single
claims submission process as the basic IDM program. The development of a single
information platform that presents clear lost time patterns and trends is the first step.
This typically requires effective negotiation between the various benefit vendors or
resources to capture the desired variables.
Create a Uniform Lost Time Strategy True lost time management springs from a
cohesive lost time strategy created by the employer. Without this philosophical or policy
base, the organization will default to individual lost time beliefs of its supervisors and
employees. On a recent review of an employer return to work program, it was reported
that they did not have a formal lost time or injury management philosophy. One was
found on a bulletin board in the Employees’ locker room…. It read…. “If you get
hurt…Call an attorney”. In lieu of a formal corporate policy, this became the only
guidance offered to the work force.
Negotiated Disability – Page 6
Define Policies to Achieve Desired Outcomes IDM policies need to define what is
expected of all the participants. If a return to work is expected, this needs to be well
defined both as to when, but more importantly on how the person should return.
Likewise, if the program is purely an income replacement program, do not expect a
timely return to work. RTW options and expectations are clearly negotiable.
Implement Target Strategies for Expected Outcomes With the development of a
uniform database and clear understanding of the impact of lost time within the
organization, specific return to work strategies can be applied. The three most effective
return to work strategies that support an IDM program are:



Formal RTW Planning with a well define WorkRx
Transitional Work Program supported by work conditioning
RTW Pathways defined prior to the work disruption
Define RTW Planning Roles and Accountability - The resumption of work following
an injury or illness does not have to be ambiguous, informal or left as an after thought.
Clear accountability must be developed to assure that both the employee and the
physician understand the nature and scope of the RTW options. This planning role is
typically negotiated between the organization and the various disability insurers. In a
fragmented program, this function is usually left to happen stance. In a coordinated
program it may be provided by one of the disability insurers. In a fully integrated
program, the employer will develop the resources to provide such guidance or work
collaboratively with the disability insurer driving the IDM process.
Educate Managers, Supervisors, Labor Leaders Managers, supervisors and union
stewards become the kings and queens of return to work. They often are the people who
determine how a person can and will return to work. They control the flexibility of the
work site. This is done through negotiation of time, work assignments and productivity
demands. A critical strategy is to offer a formal education program that prepares
supervisor, managers and union stewards to 1. Understand the impact of lost time both on
their organization and the employee and 2. What they can do to mitigate the impact.
Reduce Segmentation While many organizations are not ready, capable or interested
in a fully integrated disability management program. But, any reduction or consolidation
of the disability management fragmentation and segmentation is beneficial. This may
mean consolidating several insurance vendors into one, creating a clear RTW template
across affiliate operations or creating some degree of RTW planning continuity.
Negotiating disability may be a foreign, if not, uncomfortable concept for some. Many
insurance, human resource, as well as employers may subscribe to the notion that you are
either disabled or you are not. Disability is subjective and depends. Some form of
disability negotiation goes on every day, within every organization and physician office.
Being an effective disability negotiator can make the difference between excessive cost,
meeting productivity expectations or maintaining personal independence.
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